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Measuring Chr. Hansen Holding A/S’s (CPH:CHR) track record of past performance is a useful exercise for investors. It enables us to understand whether or not the company has met or exceed expectations, which is an insightful signal for future performance. Today I will assess CHR’s recent performance announced on 30 November 2018 and weigh these figures against its long-term trend and industry movements.
Did CHR beat its long-term earnings growth trend and its industry?
CHR’s trailing twelve-month earnings (from 30 November 2018) of €233m has increased by 4.2% compared to the previous year.
However, this one-year growth rate has been lower than its average earnings growth rate over the past 5 years of 13%, indicating the rate at which CHR is growing has slowed down. What could be happening here? Well, let’s examine what’s occurring with margins and whether the entire industry is experiencing the hit as well.
In terms of returns from investment, Chr. Hansen Holding has invested its equity funds well leading to a 33% return on equity (ROE), above the sensible minimum of 20%. Furthermore, its return on assets (ROA) of 13% exceeds the DK Chemicals industry of 6.6%, indicating Chr. Hansen Holding has used its assets more efficiently. And finally, its return on capital (ROC), which also accounts for Chr. Hansen Holding’s debt level, has increased over the past 3 years from 20% to 22%.
What does this mean?
Chr. Hansen Holding’s track record can be a valuable insight into its earnings performance, but it certainly doesn’t tell the whole story. Companies that have performed well in the past, such as Chr. Hansen Holding gives investors conviction. However, the next step would be to assess whether the future looks as optimistic. I recommend you continue to research Chr. Hansen Holding to get a better picture of the stock by looking at:
- Future Outlook: What are well-informed industry analysts predicting for CHR’s future growth? Take a look at our free research report of analyst consensus for CHR’s outlook.
- Financial Health: Are CHR’s operations financially sustainable? Balance sheets can be hard to analyze, which is why we’ve done it for you. Check out our financial health checks here.
- Other High-Performing Stocks: Are there other stocks that provide better prospects with proven track records? Explore our free list of these great stocks here.
NB: Figures in this article are calculated using data from the trailing twelve months from 30 November 2018. This may not be consistent with full year annual report figures.
To help readers see past the short term volatility of the financial market, we aim to bring you a long-term focused research analysis purely driven by fundamental data. Note that our analysis does not factor in the latest price-sensitive company announcements.
The author is an independent contributor and at the time of publication had no position in the stocks mentioned. For errors that warrant correction please contact the editor at firstname.lastname@example.org.